Oahu home sales volume declines

Prices broke records for the full year, but the hectic pace of increases slowed during the final month

THE TUMULTUOUS Oahu housing market ended a record year for single-family home and condominium prices, but prices for December were flat or slightly down from the previous month, according to figures released yesterday by the Honolulu Board of Realtors.

Even as prices were falling across the country, Honolulu's single-family homes and condominium median prices still enjoyed double-digit year-over-year growth in December.

More than half of single-family home buyers paid more than $610,000 for a house in December, a 23.3 percent rise from the year-prior $495,000. The strength of the condominium market continued to close the gap between house and condominium prices, with the year-over-year median condo price jumping 40.6 percent to $305,000.

"We ended 2005 setting record prices for single-family homes. These prices represent increases compared to 2004 prices, and far surpass prior prices on Oahu," said Mary K. Flood, president of the Honolulu Board of Realtors. "As we look forward to 2006, we believe that there's sufficient demand to cause our prices to advance even higher."

As prices continued to rise, however, the number of sales of both single-family homes and condominiums dropped. The number of houses sold fell 24.5 percent to 315 in December from the year-earlier 417. Condominium sales also declined 22.3 percent to 545 last month from the 701 recorded in December 2004.

December sales were enough to bring the total residential volume for 2005 to 12,607, an increase of 17 properties over 2004, with the dollar volume of sales just shy of $6 billion, according to Harvey Shapiro, research economist at the Honolulu Board of Realtors.

For the full year, both single-family home and condominium sales sustained substantial growth, pushing 30 percent appreciation. More than half of single-family home buyers paid more than $590,000 for a house last year, a 28.3 percent rise from the year-earlier $460,000. Annual results for Honolulu's condominium market were a little stronger, with a year-over-year median price increase of 29 percent to $269,000 up from $208,500 in 2004.

"After more than eight years of explosive sales growth, current sales activities indicate a shift to a more sustainable sales rate," Shapiro said.

Though prices showed substantial gains last year, over the course of the year sales volume stayed relatively flat, showing a scant decline in the single-family home market and a slight rise in the condominium market.

Last year, 4,617 single-family homes changed hands on Oahu, a decrease of 1.8 percent compared with 2004. Total condominium sales for 2005 increased by 1.3 percent to 7,990.

Real estate experts have said price appreciation combined with more homes being built likely will have a stabilizing effect on the market -- though demand will keep prices up.

The Honolulu market ended the year with a single-family home inventory of 1,542 dwellings, a 47.4 percent increase from the 2004 surplus. Condominium availability also increased 30 percent to 1,737 units.